Sunday December 3, 2023

SoftBank Hit Hard by China Tech Crackdown

  • SoftBank saw a massive hit to its net assets, due primarily to China's new tech rules hurting Alibaba's stock.
  • SoftBank owns nearly a quarter of Alibaba.
SoftBank Vision Fund/Design: Alex Brooks
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SoftBank took a massive hit to its net assets, as China’s crackdown on social, consumer, and gaming-focused tech companies struck at some of the company’s key investments.

The Tokyo-based tech and investment company saw its net assets drop $54 billion over its fiscal second quarter to around $184 billion. Much of that was due to a substantial drop by Alibaba, in which SoftBank owns nearly a one-quarter stake.

  • SoftBank’s Vision Fund 1 took a $7.3 billion loss for the three months ending Sept. 30. The fund’s portfolio companies include Fanatics and Gympass
  • The company is pouring money into its Vision Fund 2, saying on Monday it has brought its capital commitment in the fund to $51 billion from $40 billion on Sept. 30. The Vision Fund 2’s holdings include WHOOP, Vuori, Sorare, Tempo, Keep, and Fanatics.
  • Softbank reported an overall loss of $3.5 billion in the quarter. It cashed out around $4 billion in successful stocks to help offset losses.

The company touted new funding rounds for companies it has already invested in, including Fanatics’ $325 million round at an $18 billion valuation and WHOOP’s $200 million raise at a $3.6 billion valuation in August.

Despite the losses, SoftBank announced it would buy back up to $8.8 billion in stock over the next year.

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